Automation and Basic Income

Without meaning to, the CEO of a restaurant corporation that is busily trying to automate employees out of existence is becoming one of the best spokesmen for the idea of providing all Americans with a universal basic income.

Andy Puzder is the CEO of CKE Restaurants, which runs the Carls Jr. and Hardees fast food chains. In 2012, Puzder made about $4.5 million. But he is a true believer in the iron laws of free market, and often writes about the many wonders of capitalism.

Last week, Puzder made news when he said that he wants to open an “employee-free” restaurant, where all front-of-house tasks are automated. Today, he follows up with a Wall Street Journal op-ed that preaches the inevitability of automation in the restaurant industry. He says that consumer preference and cost savings will soon ensure that many front-of-house restaurant jobs are replaced by computers. “If consumers prefer it, or if government-mandated labor-cost increases drive prices too high,” he writes, “the traditional full-service restaurant model, like those old gas stations with the employees swarming over your car, could well become a thing of the past.”

Puzder here poses as a rational, mild-mannered businessman who is simply taking stock of reality. And he may well be correct in saying that many restaurant jobs will be lost to automation—not least because there are restaurant industry CEOs like Andy Puzder. Rather than raise prices in order to raise wages, they would prefer to eliminate jobs entirely.

Let’s assume Puzder is correct. And let’s further assume that automation begins eliminating large numbers of jobs not just in the restaurant industry, but in all sorts of service industries. Millions of lost jobs. Millions of workers that no longer fit into our modern economy. Millions of families without a way to pay the bills. Automation may be an opportunity for corporations and shareholders, but it is a threat to the American middle and lower classes.

So it is surprising that Puzder does not make the tiny logical leap towards advocating a universal basic income for every citizen in America. If you truly believe that automation could soon wipe out millions of jobs—without opening up an equal number of job opportunities in another sector of the economy—it is common sense to ask yourself, “So how will all those workers provide for themselves?” (Millions of industrial and manufacturing workers were automated out of jobs in recent decades, but were always sold the vague promise that “retraining” would allow them to settle into other industries—computers, perhaps.) If our wonderful technological progress actually shrinks the number of available jobs, people still need to eat. Perhaps the simplest and most straightforward way to ensure that these victims of progress do not end up homeless is to just raise taxes enough to put a small, but adequate, basic income in everyone’s pocket. Indeed, some of the strongest advocates of the basic income model are Silicon Valley people who are the strongest believers in the idea that machines are the future.

If you want to welcome the machines, you have to take care of the people. If you don’t like basic income, you need to offer a better idea. Otherwise you’re just a Puzder.